It’s been a tough ride for the crypto market until 2022. In November, the market had dipped by 70% from its previous peak on November 20, 2021. When things were looking down after the FTX crash turned them even more dire. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had many dips over the years. Each time, it has bounced back with a big rise.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year before reaching a bottom of $150. However, in 2017, it broke that record and hit a record highest of $19,600. Fast forward to 2018, it was trading at $3,100. In 2020, it broke that resistance and reached a new high of $68,000 in November 2021. And just like that, we’ve had another dip. But history shows us that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips tend to be followed by a long bull run, which eventually breaks through the resistance created by the previous market’s highest price. This pattern can be seen not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in the last few years. With more and more companies and industries embracing the technology, its use and acceptance is growing. From finance to gaming cryptocurrency is being utilized in a variety of ways. And this growing use case can lead to more people getting involved in the market which could boost prices.
Increased institutional interest in cryptocurrency
In recent times, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds, many large institutions are beginning to investigate the possibilities in crypto currencies. The increased interest of institutions could bring more stability to the crypto market and lead to greater prices.
Regulations of the government
As the crypto market is maturing and mature, governments across the globe are beginning to develop more favorable rules for cryptocurrency. This will help draw more investors and boost the mainstream adoption of crypto.
More use cases for blockchain
The technology that underlies many cryptocurrencies, blockchain, is a broad range of applications that go beyond just financial transactions. For example, from supply chain management and voting, many and more industries are exploring ways they can benefit from blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is still in the early stages of development. As advancements continue to be made in areas such as scalability and security, the potential of crypto assets will grow. This could result in more use and increase in prices.
Uncertainty in the global economy
Due to the constant instability in the economy caused due to the COVID-19 pandemic, as well as other causes many investors are beginning to look for safe haven assets like cryptocurrency and gold. As the global economic situation is uncertain, this could lead to increased demand for crypto and higher prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in cryptocurrency. Retail investors, or individual investors are also beginning to get involved in the market for crypto. As more and more people are educated about cryptocurrency and investing in it, this could lead to increased demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto grows as more and more people are beginning to become aware about it and comprehend the concept. As understanding and acceptance of cryptocurrency grows, this could lead to more people buying and holding crypto, which could increase prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market, which allows financial services to be developed on top of blockchain technology. As DeFi continues to grow and more projects and platforms come online, this could result in increased use and higher prices for crypto.
The development of crypto payment methods
As the market for crypto grows, more and more companies are beginning accepting crypto payments as a form of payment. This could lead to an increase in the usage of crypto in daily transactions, and a rise in prices.
The increased investment of sovereign wealth funds
These funds are owned by the state as instruments for investing, are starting to explore crypto as a potential asset class. As more funds dedicate a part of their portfolio to crypto, this could increase demand and more expensive prices.
Use of crypto for payment across borders
One of the biggest benefits of crypto is its ability to facilitate quick and inexpensive cross-border payments. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions this could lead to increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
As the number of ATMs for crypto continue to increase, it will become easier for people to buy and keep cryptocurrency, which can boost demand and increase prices.
Security tokens are developed for development
Security tokens, also known as digital assets that signify ownership of an asset, such as real estate or stock are rapidly expanding area of the crypto market. With the increasing number of security tokens being created and traded, this could lead to increased demand and higher prices for crypto.
Merchants are more likely to adopt the concept.
With the increasing number of merchants start accepting crypto as a form of payment, it makes it easier for customers to hold and use crypto, which can increase demand and price.
So, will crypto rise in 2023? The only way to know is time. But with these factors to consider, it’s possible that the crypto market will have a rebound by 2023. And for those who are looking to invest for the long haul Being patient and disciplined will be key.